Lord & Taylor, Hudson's Bay Go Big on Beacons

While many retailers
have been dabbling with beacons for many months to see how they might work with their customers, one major retailer is now taking the step of large-scale deployment in North America.

Hudson’s Bay Company (HBC), which owns Lord & Taylor, Hudson’s Bay and Saks Fifth Avenue, is rolling out beacons at select U.S. and Canadian stores.

HBC operates more than
130 Lord & Taylor and Hudson’s Bay department stores and some of those are now a beacon-equipped, sending shoppers messages as they enter the store and pass by certain merchandise.

Since I knew beacons already were installed at the Lord & Taylor in Boston, I headed there to check out the experience over the weekend.

As I entered the store, somewhat ironically
located just a few blocks from Beacon Street and Beacon Hill, I received a message on my iPhone 5S welcoming me to the store and instantly allowing me to opt out, which I obviously didn’t
do.

Knowing that the store was deploying beacons in seven departments with individualized campaigns, I started roaming the aisles of the massive department store.

As I approached the
cosmetics department, I received a message that identified the best sellers and then tips, like “ask about our current free gifts with purchase.”

In another department, I received
a coupon offering up to 70% off certain items with a specific “reveal code,” which obviously could be used to track beacon effectiveness.

As I approached the handbag department, I
received a promo for Michael Kors handbags, a display I could see from where I was standing. In the men’s department I got another discount offer with yet another “reveal
code.”

The point is, the beacons worked perfectly, from a technological standpoint, a first major hurdle in any beacon implementation.

There are some interesting and innovative
twists to this just announced implementation.

Rather than using its own app, Lord & Taylor is tapping into third-party apps. Many retailers already found that most of their mobile shoppers
lean far more heavily on their mobile websites rather than the store’s app for commerce.

By using third party apps, Lord & Taylor increases its chances of consumers having the app
loaded, which is a current, high-bar requirement for beacons to be effective.

The first app being used for Lord & Taylor beacons is SnipSnap, a nifty coupon app already on the phones of a
few million people. I regularly use SnipSnap in stores, since it quickly provides all the normal coupons that traditionally come in the mail and that you forget at home, like those from Best Buy and
Bed Bath & Beyond.

For the Hudson’s Bay stores in Canada, the widely used Hudson’s Bay Gift Registry is being used.

For my Lord & Taylor beacons shopping trip, I
used SnipSnap.

Lord & Taylor already was familiar with the app, since it used it back in May to send mystery coupons to consumers based on their proximity to a store, driving those people
by offering up to a 25% discount.

Beacons can easily be used to reach a passerby and invite them into the store by an offer, as was the case with the early SnipSnap coupon test.

By not
launching the beacon implementation on the store’s own app, the other implication is the apparent intent to acquire new customers rather than try to reach its regular customer set. This approach
also offers both an easy way to measure success, based on new customers, and less risk by not modifying current customer behavior.

The move
to third-party apps for beacons strikes me as an interesting evolution in beacon thinking.

“We initially had our own consumer app and we used it to learn what consumers were doing in
stores,” Hilmi Ozguc, founder and CEO of Swirl, told me.

“Bluetooth low energy came along and we did our own hardware designs for beacons and then moved the learnings into an SDK
(software development kit) so third party apps could use it. Most retailer apps are not widely distributed.”

The Swirl platform is really a marketing and advertising platform, which is
the main focus once the beacon technology is in place.

Lord & Taylor has a digital dashboard to see if a person is in a particular zone for a period of time and can send specific content
to that phone. Lord & Taylor can view all the beacons in the country and can watch and respond in real time to offers that need to be tweaked.

“Beacon technology is the future of
retail marketing,” said Michael Crotty, EVP and Chief Marketing Officer of HBC.

“The key to the messaging is relevance,” said Ozguc. “The magic here is
context: right time, right place.”

Lord & Taylor has about 10 beacons per store. At the Boston store, I could see the Swirl beacon tucked high in the entrance near the Lord &
Taylor sign and in various department, discretely attached between ceiling tiles.

In my beacon shopping trip, I used Lord & Taylor’s WiFi and between tapping the message and
receiving the offer, a screen appears saying “Accessing In-Store Content,” notifying the shopper that they are now interacting with the store and not an app, another interesting twist.

The obvious next step for Lord & Taylor and Swirl is to sign up more apps for the SDK, which is highly likely as more retailers start to move from beacon trial to implementation, especially now
that one has made the leap.

Beacons are finally hitting the street.

Beacons and all the other major issues relating to mobile commerce will be discussed
at the MediaPost OMMA mCommerce conference in New York on Aug. 7. You can check out the agenda where you also can register to attend. Will I see you there?

Chuck Martin is editor of the IoT Daily at MediaPost and writes the daily Connected Thinking and MobileShopTalk columns. He is a NY Times Business bestselling author of "Mobile Influence" and “The Third Screen.” He is working on a new book titled “The Internet of Everything” (IoE). He is CEO of Mobile Future Institute and a frequent keynote speaker internationally. Follow him on Twitter @chuckmartin and contact him at Chuck@MediaPost.com.